In the wake of its incursion into Ukraine, the Russian administration on March 7 declared Japan as one of 48 nations and regions “engaging in hostile activities towards Russia,” according to Russian state information agency Tass.
The move taken by Moscow as a reaction to sanctions after its invasion of Ukraine is expected to allow the repayment of those who owe money to the designated regions and countries in rubles. Russia is also expected to tighten its restrictions on the transactions of companies and other organizations from the identified countries and regions.
The move appears to be intended to stop Russian borrowers from defaulting on loans in foreign currencies. However, it could confuse the borrowers since the ruble’s price has dropped following the invasion.
Russian President Vladimir Putin instructed the government to prepare a list of countries and regions in a March 5 executive decision. The list includes, in addition to those mentioned, including the U.S., Canada, the U.K., EU nations, and Ukraine; the list also comprises Asian countries and areas like Japan, South Korea, and Taiwan.
In this way, Russian government agencies, businesses, and other organizations can set up special accounts to repay obligations to the specified nations and areas in rubles. These measures apply to loans of more than the amount of 10 million rubles (about $76,000) each month, and it is not known whether creditors will be in a position to deny.
The March 7 decree issued by the Russian government requires approval from the Government Commission on Monitoring Foreign Investment to allow Russian companies to conduct business with foreign firms and individuals who reside in the regions and countries listed. The government panel can make a decision based on an application to accept the deal and impose any conditions. According to Tass, the Russian government has explained that the decision is intended to safeguard the stability of Russia’s finances amid the pressure of international sanctions.
Source: The Mainichi
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